Personal Insolvency At Four-Year Low

The Insolvency Service said on Friday (February 1st) that the number of people being declared insolvent in England and Wales fell last year to the lowest level since 2008.

There were 25,302 individual insolvencies in England and Wales in the fourth quarter of 2012, which was a decrease of 12.9 per cent on the same period a year ago.

This was made up of 6,919 bankruptcies, which were down 20.1 per cent on the corresponding quarter of the previous year, 7,397 Debt Relief Orders (DROs), which were up 0.5 per cent on the corresponding quarter of the previous year and 10,986 Individual Voluntary Arrangements (IVAs), which were down 15.8 per cent on the corresponding quarter of the previous year.

Of the bankruptcies, 5,487 were made on the petition of the debtor and this represented almost 80 per cent of total cases.

According to the Insolvency service, the level of debtor petition bankruptcies has been following a generally decreasing trend since the beginning of 2009 when there were 17,606, amounting to 86 per cent of the total.

Creditor petition bankruptcy numbers have also been falling over a similar period, though less rapidly and less consistently.

The Service also reported that compulsory liquidations and creditors’ voluntary liquidations in England and Wales fell in the fourth quarter, on a seasonally adjusted basis. There were 3,834 of them in total, which was a decrease of 3.3 per cent on the previous quarter and 10.7 per cent less than the same quarter a year ago.

This was made up of 922 compulsory liquidations, which were down 15.2 per cent on the previous quarter and down 33.8 per cent on the corresponding quarter of the previous year, and 2,912 creditors’ voluntary liquidations, which were up 1.2 per cent on the previous quarter and up 0.4 per cent on the corresponding quarter of the previous year.

Tim Close is an accountant specialising in business insolvency, debt recovery and business rescue.

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